Applicable Rate of Compensating Tax on Importation of 475 Metric Tons of Soda Ash Dense in Bulk

March 24, 1986 BIR RULING NO. 023-86 199-000-00 023-86 Gentlemen : This refers to your letter dated January 14, 1986 requesting a ruling as to the applicable rate of compensating tax on your importation of 475 Metric Tons of soda ash dense in bulk. Documentary evidence submitted show that you opened a Letter of Credit No. 32324 dated November 18, 1985 for the importation of 600 metric tons of soda ash dense in the amount of P1,517,049.00, that on the same date, you deposited the amount of P227,557.35 as a partial payment of taxes and duties due on said importation with the Bureau of Customs under Official Receipt No. 688308 dated November 18, 1985, pursuant to Central Bank Circular No. 909 dated February 7, 1983; that on December 26, 1985, your said importation of only 475 metric tons of soda ash dense in bulk arrived on board MV "National Integrity" under Bill of Lading No. L/M4; that on December 27, 1985 you filed with this Office your application for authority to release from customs custody your imported 475 metric tons of soda ash dense in bulk in the amount of $64,125.00 which authority was granted under ATRIG No. NARD-85-012145 upon your payment of the 10% compensating tax; that the District Deputy Collector of Customs approved your Special Permit to Transfer (No. 003682) said importation to your warehouse upon your full payment of the amount of P248,817.00 representing the compensating tax and duties due thereon; that the amount of P227,557.35 was paid under Bureau of Customs Official Receipt No. 688308 dated November 18, 1985 while the balance of P21,260.00 was paid under Bureau of Customs Official Receipt No. 1738334 dated December 31, 1985; and that your importation was released and transferred on December 31, 1985 to your warehouse. In reply, please be informed that importation begins when the carrying vessel or aircraft enters the jurisdiction of the Philippines with intention to unload therein. Importation is deemed terminated upon payment of the duties, taxes and other charges due upon the articles, or secured to be paid, at a port of entry and the legal permit for withdrawal shall have been granted. (Sec. 1202, Tariff & Customs Code) "As it is in the will of the importer or the owner of the imported goods to choose the moment for making payment of the internal revenue tax from its arrival at the port of Manila until immediately before its withdrawal from the Customhouse, the law in force when the payment is made is the one that should prevail, for human voluntary acts are governed by the laws in force at the time of their performance, unless there is a legal provision to the contrary ." (emphasis supplied, Luzon Brokerage Co., Inc. vs. Posadas, 31 Phil. 305). Moreover, it is clear from Section 204 of the Tax Code that compensating tax is to be computed as of the date of withdrawal or removal of the goods from the customhouse; hence, the rate of tax prevailing on such date has perforce to be applied. (F.F. Namlin vs. Collector, G.R. No. L-12991, Dec. 23, 1953) Accordingly, since your imported 475 metric tons of soda ash dense had been legally transferred to your warehouse upon your full payment of the taxes and duties due thereon on December 31, 1985, or before January 1, 1986, your said importation is subject to 10% compensating tax under Section 199(a), in relation to Section 204, both of the Tax Code of 1977. aisadc Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner